The First Minister asked the Public Policy Institute for Wales (PPIW) for independent advice on the development of options for extending support for childcare in Wales; and, in particular, the potential impact of extending the Welsh Government’s provision of free childcare for three to four year olds.
The PPIW worked with Dr Gillian Paull (Frontier Economics) to model the impact of offering 20 hours of free childcare to three to four year olds, in addition to the existing provision for pre-school children; considering two variants:
The modelling seeks to estimate the effect that these options would have on:
This work suggests the impacts on employment and income are very small – leading to a less than 1 percentage point change in maternal employment among target families; and, at most, a 2 percentage point reduction in poverty levels among target families.
It also highlights that Welsh Government spending would lead to a reduction in the benefits which families receive (from the childcare element of Universal Credit and Tax Free Childcare), saving the UK Government £20m a year
The impact on child development was not considered as part of this work.